How Verizon Could Shake Up the Canadian Wireless Market

Previous reports have put Verizon reportedly bidding $700 million for WIND Mobile and also engaged in talks with Mobilicity (the chatter caused incumbent stock prices to drop immediately). Should Verizon enter Canada, the massive US carrier could impact the wireless market here in a variety of ways (with Rogers and TELUS said to be impacted the most) by creating ‘real’ competition against our incumbents, but some believe it will be a huge undertaking to make a difference.

Capital Costs of Replacing WIND Mobile Infrastructure Estimated at $100 Million

The Globe and Mail reports Verizon’s plans to change WIND Mobile’s Huawei equipment with its own could cost up to $100 million dollars; the latter has been accused of having its equipment compromised by the Chinese government:

Though Huawei has always strenuously denied such claims, Verizon could win points in Ottawa by proposing to simply rip out Huawei’s equipment from Wind’s backbone network, a move that could cost up to $100-million, according to sources familiar with the matter.

Rogers Source Says Verizon Investment to Setup Shop Would Be Too Expensive

According to the in-depth article, an anonymous Rogers source says numerous companies (which we can presume would be other carriers) would be pleased to see Verizon enter Canada, only to eventually find out it’s a massive undertaking to penetrate the market:

“I think a few companies would be happy to sit back and watch Verizon blow its brains out,” said one source close to Rogers, who spoke on condition of anonymity.

Verizon could also shake up the upcoming bidding for four prime blocks of 700MHz spectrum. The US carrier would quality as a new entrant carrier and be able to bid on two blocks, whereas Ottawa has limited incumbents to one block. This means one incumbent could lose out if Verizon maximizes its bid for two blocks of spectrum.

Mirko Bibic, executive vice-president and chief legal and regulatory officer for BCE Inc. says this scenario is “particularly troubling,” especially since Canadian carriers would never enjoy special treatment like this in America:

“It is not like the U.S. government is saying to any of the Canadian wireless players, ‘Hey, come get spectrum in New York; come get spectrum in Chicago, Miami, Phoenix, L.A. at an advantage over [Verizon], AT&T and Sprint.”

Verizon Could Unify the North American Wireless Market

As for setting up shop in Canada? Michael Geist says Verizon could unify the North American communications market, eradicating roaming charges for both countries:

The prospect of a Verizon entry into Canada would put a single communications market into overdrive. On the telecom side, Verizon could use its Canadian network to change the approach to roaming in North America altogether, since it would be uniquely positioned to offer a single U.S. and Canadian network.

The company could move to eliminate roaming fees for U.S. and Canadian customers, while offering cost-competitive U.S. and Canadian roaming together for international providers establishing wholesale roaming agreements. Such a plan would obviously be attractive to the corporate sector as well as regular cross-border travellers, leading to the gradual elimination of roaming and long distance charges for calls throughout North America.

Canadians have long wanted increased wireless competition and Ottawa seems adamant to make it happen. It’s just a matter of time. Would you welcome Verizon entering the Canadian wireless market?